Which of the following statements is true regarding the Unrealized Loss on Investments account

A) It is contra to the Allowance to Adjust Short Term Investments to Market Value

B) It is reported on the income statement when it pertains to short term investments

C) It is debited when securities are sold for less than their purchase price

D) It is not reported on the financial statements; only realized gains and losses are reported

B) It is reported on the income statement when it pertains to short term investments

Explanation:

Unrealised loss is defined as a reduction in the value of an asset that is held by an investor rather than selling it and realising a loss.

Unrealised loss is also called paper loss. This loss is not realised until the asset is sold.

Unrealised losses are not usually recorded on the income statement unless they intend to be sold in a short time.

When a security is to be sold in the short run it is called a trading security. Trading securities are represented in the income statement as they can increase or reduce income